Pensions

Imagine that babies being born today may just not live to 100 years old or even 125 years old. Imagine if they were to live to 142 years old.  But let’s look at you folks. If you’re a male age 65 today, you have a 50% chance of living to at least 85 and a 30% chance of living to age 90. If you’re a female age 65, you have a 50% of living to 87 and a 41% of living to age 90. If you’re a married couple both age 65, there is a 50% chance that at least one of you will live to be age 91 and a 31% chance that one of you will live to age 95. So like I said, if you’re going to be alive for another ten, twenty, or thirty years, you have to make sure that your sources of retirement income will be there to accommodate those years.

So what are the typical sources of retirement income that many of you have? Number one is we have our personal retirement accounts like IRAs, Roths, 401(k)s, etc. Second, most retirees count on Social Security as a major source of retirement income. Finally, some of us are even lucky enough to still have pensions through our employer.

What is one of the types of retirement income.

************** Pensions ****************

Unfortunately, pensions are going the way of the dodo bird. After the 2008 crash, many of the Fortune 500 companies decided that it was too expensive to provide pensions to their employees. Many of them even went as far as to offer their employees a lump-sum for forgoing their pensions. Why? Because they know that actuarially, their employees have an increasing chance of living longer and longer, which meant that the company would have to keep paying that pension longer and longer. So only about one-quarter of the Fortune 500 companies still offer their employees pensions, and it’s a safe bet that this number will only continue to decrease as it has done for the past twenty years.

At first glance, the concept of a Pension seems simple enough: a structured way to receive income for your golden years. Unfortunately, that simple idea becomes one of the most complex areas of estate planning once you apply other sources of retirement income such as Social Security and IRAs.

There are a few results we expect you to have when you come in to meet with us: A better understanding of your Pension, Retirement Accounts, and Social Security; an assessment of when you can retire if you haven’t already, learning about ways to receive more income from your current retirement assets in order to prevent the Income Gap, possibly creating passive income.

And last but not least, analyzing your pension payout if you have a pension, and finally replacing lost income with tax-free retirement income.